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May 17, 2021 by |

Santa Clara County Financial Elder Abuse Attorney: Real Estate Ponzi Scheme Targeting Elder Investors

ATTORNEY NEWSLETTER

Elders Encouraged To Liquidate Retirement Savings 

$2.7 Million Scheme Targeted Older Investors

Scheme Continued For Six Years

In a Ponzi scheme, fraudsters use money they collect from new investors to pay existing investors. What appears to be a return on your investment is actually money from another investor who has been swindled.  Bernard Madoff, who ran the largest Ponzi scheme in history to date, died in prison this week after spending 11 years in prison for an Ponzi scheme he ran for decades cheating investors, many of whom were elderly, out of billions.  Ponzi schemes have by no means gone way with Madoff’s imprisonment and death.  They continue to this day, and the elderly are still often the victims of such schemes.  A real red flag for any Ponzi scheme is a “guaranteed” return that is in excess of available returns on CDs, market indexes, bonds and other investments; remember the saying that if things sound too good to be true they are probably not true.  Evans Law Firm, Inc. can represent you if you lose money in a Ponzi scheme or as the result of annuity fraud, insider trading, securities misrepresentations or nondisclosures, accounting fraud or any other type of securities fraud or financial elder abuse here in California.  If you have, call us today at (415)441-8669. 

Ponzi Scheme Against The Elderly

In one reported case[1], the Securities and Exchange Commission (SEC) charged two brothers, and a company that they founded purportedly to develop and sell real estate, with engaging in a $2.7 million Ponzi scheme that targeted approximately 30, largely elderly and unsophisticated investors over a six-year period. According to the SEC defendants committed the following crimes and acts of financial elder abuse:

  • For a period of six years, defendants allegedly told investors that they would share in the profits of a real estate venture that purportedly bought, redeveloped and sold properties.
  • A brochure and website for the venture specifically targeted senior investors: “provid[ing] an opportunity for the senior investor to share in the profits from prudent investments in real estate” and “giv[ing] the senior investor a guaranteed monthly income.”
  • In fact there were no real estate assets, no operations, no employees, and no ability to provide income to investors (much less “guaranteed” income).
  • At times, defendants recommended that older investors liquidate other holdings, including retirement assets, to invest in the fraudulent scheme.
  • Instead of investing in real estate, hundreds of thousands of dollars of investor funds were used to pay other investors.
  • Other funds were used for personal expenses, such as, for example, to purchase tickets for sporting events, to pay for college tuition and sorority dues for one defendant’s daughter, to pay personal credit card bills, and to purchase a condominium occupied by a relative of one of the defendants.

Protecting Elder Investors From Fraudulent Schemes

Family involvement in an isolated senior’s or dependent/disabled person’s life is the surest way to prevent this kind of fraud and financial abuse perpetrated against older investors. In-person contact may still be off-limits if the senior or dependent adult (or you) have not yet been vaccinated.  But regular phone calls are important and, better yet,  Zoom or Facetime are good ways to communicate if the technology is available. Beyond that, monitor credit cards and bank accounts online. If you see suspicious movements of money or closing of accounts, do something about it. Talk honestly with your older loved ones about financial matters and make sure they do not make any decisions without consulting you, a close and trusted friend or another professional.  We all need second opinions on important decisions, particularly financial ones. If something is wrong or you suspect fraud or abuse, call us today. 

Contact Us

Ingrid M. Evans represents Santa Clara County elder and dependent adults who are victims of any kind of financial exploitation or other abuse.  Ingrid and our other attorneys can be reached at (415) 441-8669, or email us at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. 

[1] The case was a prosecution by the U.S. Securities and Exchange Commission (SEC). Evans Law Firm, Inc. was not involved in the case in any way.

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